When serial entrepreneurs John Lewis and Jack Merry see something that isn’t working, they view it as a potential business opportunity.
Looking to improve how debts were being collected, the two men founded their latest company, El Dorado Hills-based Intellaegis, in 2007 along with Shawn Britton. Their software not only helps financial institutions track down consumers who owe money, it also ensures that creditors and agents comply with federal laws that protect consumers from slander and intimidation.
“The big companies, they don’t want their name in the newspaper (because) they hired this debt collector that did something really bad – harassed a mother in front of her kids or did something that led to a death,” Lewis said.
Intellaegis’ software ensures a system of accountability, even if a company is working with different independent collectors, Lewis said. For example, when a collector contacts a consumer, a record of the call is logged automatically rather than relying on notes. Lewis and his team met with federal regulators to determine the features that would best verify compliance.
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“Inside of a financial institution, the account that goes delinquent will be worked by one person and then another person and then another person,” he said. “ ... As you get further down the road and it gets closer to becoming a loss, then what happens is they go out to collection agencies or debt collectors or repossessors, whoever it is that works externally on those loans. Now, you may have two or three companies with several people involved.”
Intellaegis’ software creates a way to document and share information among the appropriate parties.
Lewis and Merry spoke with The Bee about why they think Intellaegis is poised for growth, what contributed to their entrepreneurial success and lessons they’ve learned starting their own businesses.
Q: How did you become an entrepreneur?
A: (Lewis): I’ve been involved in the auto-finance industry for probably 30 years. I used to work for Chrysler Financial. My job was to help the collectors find people who didn’t want to be found, people who had made loans and then skipped out on their loans.
I helped large corporations such as Chrysler manage risk. I left Chrysler and my wife and I started a couple of servicing companies that did (tracking), probably more efficiently than what the capital lender Chrysler was able to do. The lenders can do only so much, not because they don’t have the tools or the skills, but a lot of times, they just don’t really perform as efficiently as the vendors do. So, they hire third-party vendors, and that’s what my wife and I did for a number of years.
We built some of the largest servicing companies around identifying and mitigating risk for auto-finance companies. Then we sold those companies and kind-of semi-retired. We did some other things in real estate. We raised our kids, took a little bit of time off. Then we came back in 2007 to try to address a problem that we saw as a lack of good software out there in the auto finance industry.
I didn’t really know anything about software, so I was talking to our accountant. He said, ‘You should get ahold of a guy named Jack Merry. Jack’s a client of mine. He lives in El Dorado Hills, and he knows all about building software.’
A: (Merry): From the time I can remember as a kid, probably age 7 or 8, I wanted to be a businessman, and I wanted to carry a briefcase. My dad (Albert Merry) was an entrepreneur at that time, and my uncle (Clayton Merry) developed Merry Tillers back in the 1950s. It was a hand-tiller that you go out and till your own garden.
You started it with a little engine. It was really at the beginning of small motorized tools. When TV first came out, there was a show that would spotlight businesses worldwide, and he was on that. There was some entrepreneurship in the family. It was a drive, and I had it.
My background is just being in the computer business, the software business, for the last 30 or 40 years, and in different aspects. Basically before I came here, I had developed a company (DebtPlus) that sold financial management software to credit counselors. I developed a system that automated their work, bringing it into the world of Windows. I sold the rights to it in 2010.
Q: Why do you think Intellaegis is poised to grow?
A: (Lewis): The government has realized that everybody is working in different softwares. The information that is critical, the knowledge of what happened is not being passed from person to person or company to company or from software to software. That’s what we do.
We solve that problem. We go in and create a software that integrates with other softwares so that the information can be easily be passed from person to person, from company to company, and it can be easily read.
Then we put rules on top of phone numbers. For example, if someone calls a phone number and they’re not allowed to ever call that number again, we make sure that number is marked, so the next person or company that pulls up that phone number, it will say, ‘Do not call,’ and there’s a way to track enforcement of that rule.
It gives financial institutions an audit trail, and when the regulators come in, they can see, ‘Oh, you’re on top of things. You’re auditing all your phone numbers. You have a reason to gather information.’
We’ve (sold software to) the bigger financial companies and the bigger vendors in the country, so we know we can penetrate the users of any bank or any vendor because we’ve already done it for some of the most established, toughest, biggest institutions in their respective industries.
That penetration really helps us now that we have a working product. Now it’s time to go prime time, as our chairman Mark Floyd says. He was the CEO of Exeter Finance, one of the largest auto-finance companies in the country, and he was the chief operating officer at a company called AmeriCredit.
He came and joined our board, a little company like us, and became the chairman because he said: ‘That is a game-changing product, and I want to be associated with those guys.’ His job is to help us get to that growth stage, as he’s done for other companies before us.
Q: What influenced your work ethic?
A: (Merry): I’ve been married now to my second wife (Caroline Merry) for 33 years, and we just had an anniversary. I managed to make a lot of money through my life but not keep it. One of the things my parents didn’t teach me was how to manage money.
I met my second wife, and she doesn’t have any college (experience). She was raised in the Colfax-Meadow Vista area. She went to school there and moved out on her own when she was 18. She really was driven. She works hard and is very responsible. She’s my dream girl, the one I was looking for.
When I met her, I started keeping money because she took care of it. She actually is responsible for building the DebtPlus company. She’s very good at software design and software applications and working with customers. We had the biggest consumer credit counseling agencies in the country as clients. Most of the credit for that goes to her. I did the computer side, but she did the applications side.
She is still working for the companies to this day. She’s been a very good part of my life.
A: (Lewis): On a broader scope, it was Lee Iacocca (who influenced me). He came to Chrysler a little before I was hired, and he really revolutionized the company and changed things. He did it in a way that came down all the way to the position I was in. He was directing the head of finance to make changes and solve problems. I was part of the solution and was able to go and do things that wouldn’t be done by a local collector.
More directly, my boss at Chrysler, Bob Cunneen, who has since passed on, he was a big influence in my career.
Probably the biggest influence on me is my wife (Perla Lewis). We’ve been married 28 years. We’re business partners. We’ve raised two kids successfully, and we have built and sold seven different businesses, and she’s right there handling the finances on every business. She follows my ideas, which are sometimes too many and sometimes kind of crazy. She somehow manages to keep them in line and helps me get to where we need to get. She does it by not just keeping the books organized but really looking at where the problems are, helping me to understand how to make operational decisions that can be more beneficial to the company.
Q: What advice would you give to young people?
A: (Lewis): Keep your vices recreational. You’ve got to focus. If you drink too much, if you smoke too much, if you don’t focus, you’ll waste an opportunity. I wasted an opportunity to get an education. I had to learn the hard way.
People say, ‘Oh, John, you didn’t need to go to college. Look what you’ve done.’ And, I know what I’ve accomplished, but I also know what I had to do to get there. I didn’t understand the importance of a formal education or that the process of learning is as important as what you learn.
Nobody in my family had ever gone to college. I went because all my friends did. It became the biggest party I ever had, and that was stupid. I’ve had to self-educate by reading books and hanging around smart people. I kept my mind open and managed to learn, but there was a better way to do it.
Title: Partner and chief information security officer at Intellaegis
Education: Studied at Washington State University
Title: Partner and chief executive officer
Education: Studied at Eastern Illinois University